BAA's chaotic response to the Heathrow snow crisis is exposed in a report that portrays a fiasco exacerbated by equipment shortages, poor communication and inadequate preparations including a slow reaction to alarming weather forecasts.

Up to 10,000 passengers a night camped out in terminals as one hour of snowfall caused four days of severe disruption in the week before Christmas, with more than 4,000 flights cancelled as the owner of Britain's largest airport struggled to co-ordinate a response with airlines. Depicting scenes that have once again tarnished Heathrow's reputation, the report said stranded passengers slept in tube stations while deliveries of blankets were blocked by the snowbound M25.

Significant failings were outlined in a report by an independent BAA board director, Professor David Begg. They include:

• A failure to respond to weather forecasts warning of severe snowfall.

• The slow clearance of aircraft stands, caused in part by lack of equipment, which left dozens of jets frozen to the tarmac.

• "Confused and contradictory" messages to airlines and passengers.

• Several failures in internal communication and co-ordination within BAA.

• Insufficient stocks of blankets, food and water to cope with stranded passengers.

Begg said he was surprised by the chaotic response to a blizzard on 18 December that dumped 9cm of snow on the airport and shut both runways for about 36 hours, with at least one runway remaining shut for the next two days. "I and the [enquiry] panel were surprised that the level of preparation, for a weather event that was off the radar, was not much better than transpired," he said.

Colin Matthews, BAA chief executive, said the £50m would be invested in new equipment and a new crisis centre for the co-ordination of a joint response between the airport and airlines.

Asked if BAA had learned its lesson and could cope with a repeat of the December conditions, Matthews said: "Faced with the same event, definitely."

The report did allow that the country was in the middle of its coldest December for 100 years, with Heathrow recording its highest ever amount of snow in one hour on 18 December. It was also expected to be Heathrow's busiest weekend of the year, with most flights close to fully booked.

Begg's panel, which included experts from airports in Montreal and Zurich, said some airlines also appeared to ignore European Union regulations requiring carriers to provide accommodation for stranded passengers. "There was an apparent lack of compliance by some airlines," the report said.

However, Begg added that it took two days for BAA to react properly to the overcrowding that saw 9,500 passengers stay in terminals on the Saturday night, followed by 5,000 people for each of the next two nights. Most of northern Europe was hit by severe weather that week, but Heathrow was by far the worst performer, closing for just under 40 hours while Charles de Gaulle in Paris shut for 10 hours.

Publishing a blow-by-blow account of the events around 18 December for the first time, the report tells of airline ground handling crews being sent home, discussions of military assistance, aircraft stands frozen by the detritus from de-icing operations and offers of help from construction companies that were initially ignored. Setting a target of keeping Heathrow open at all times except when safety is threatened, Begg said BAA had to enforce its snow plans more rigorously to ensure that the next severe weather event does not shut the airport.

"There was insufficient attention given by BAA and the airline community at Heathrow to reviewing and improving the snow plan and testing its application," said the report. Virgin Atlantic, one of Heathrow's largest carriers, warned that the cost of the £50m snow investment must not be passed on to passengers via higher landing fees or car parking charges.

"We too often shoulder the majority of the costs when failures outside of our control occur," the airline said.